Ottawa needs a new legal framework to get the oil moving

Walied Soliman is the chair and Justin Ferrara is a partner of Norton Rose Fulbright Canada LLP.

Alberta is hurting. And if Alberta is hurting, Canada is hurting. The Federal Court of Appeal’s recent decision to block the approval of the Trans Mountain pipeline is just the latest in a series of blows to Alberta’s economy.

As lawyers and as Canadians, we call on the federal government to adopt a bold new legislative framework to get the oil moving through Canada to fair-priced global markets. Things have never been more urgent.

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First, some facts. The 2011 census was the first one that showed a larger population west of Ontario than east of it. Alberta has been leading the charge in the West’s growth story, experiencing population growth of 11.6 per cent between 2011 and 2016. This increase was almost twice the increase in the next fastest-growing province.

They come because they see the province’s potential. More than 100 years after Wilfrid Laurier’s Minister of the Interior Clifford Sifton advertised Western Canada as the world’s “Last Best West,” people from across Canada and around the world still view Alberta that way. And that potential is rooted in the natural resources industry.

Yet in the past few years, the oil crash and the failure to build a pipeline have weighed severely on Alberta’s economy. By way of illustration, more than 100,000 oil-patch workers — or roughly one in three — lost their jobs during the crash.

What is to be done? We believe that Prime Minister Justin Trudeau should get on a plane and address an emergency session of the Alberta legislature to outline his plan to help Alberta. For the situation we face is nothing less than that: a national emergency.

In that speech, he should lay out a bold new legislative framework to get the oil moving to market. That framework should have a few key elements.

First, Ottawa and the provinces need to cut business and personal taxes, and regulations that affect business. In a context in which the United States has drastically cut corporate taxes and pared back regulations, Canada cannot afford to lag. We can all debate the ideal level of taxation and government services for a utopian desert island. We can’t debate the economic reality Canada faces. It is a tragedy to hear the CEO of a major Canadian resource company say that “[w]e’re having to look at Canada quite hard” because of the impact of taxes and regulations.

Second, the federal government needs to recognize that in today’s climate, the national framework for taxing carbon is on life support. You cannot kick people while they are down. This is why Premier Rachel Notley has scrapped her plans to increase Alberta’s carbon tax and withdrawn her support for the federal government’s carbon plans.

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Third, the federal government needs to overhaul the pipeline approval process in the national interest. This means scrapping Bill C-69, the legislation to revise the environmental review process currently before the Senate, while there is still time. C-69 would make the current approval process even more unwieldy, turning it into a venue for debating everything from climate change, to Indigenous consultation, to gender-based analysis.

Thankfully, unlike most of the world’s leading petroleum exporters, Canada is a democracy. But these important considerations are essentially political. They are more properly the subject of respectful democratic deliberation than of pipeline approvals, which should be narrow, technical and tailored. The main goal of the approval process must be to provide certainty around both timing and outcome.

Fourth, the federal government needs to adjust its tone to treat pipelines as the nation-building projects they are. Under Section 92 of the Constitution Act, 1867, the federal government has exclusive authority over “Lines of Steam or other Ships, Railways, Canals, Telegraphs, and other Works and Undertakings connecting the Province with any other or others of the Provinces, or extending beyond the Limits of the Province.” Ottawa needs to act like it. This means standing up unequivocally for the national interest, rather than indulging provincial hostage-taking every time a new project is announced.

Lastly, and in the short term, Ottawa should satisfy the conditions set out in the Federal Court of Appeal’s Trans Mountain ruling as quickly as possible in the event an appeal is unsuccessful.

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